Lamprell plc. Preliminary Results 2008

Transcription

1 Preliminary Results 2008

2 Agenda 2008 highlights Operational Financial Board changes Operating review New build EPC New build construction for the offshore oil & gas sector Jackup upgrade and refurbishment Financial review Future strategy & outlook 2

3 2008 Operational Highlights Visibility of revenue Order book of US$ 600m No order book cancellations Focus on repeat business, new build opportunities and related diversification Award of major contracts Riginvest US$ 186m BassDrill US$ 205m Strong performance in 2008 across all primary activities Major new build projects One BassTech design self erecting tender assist drilling unit US$ 102m Three LeTourneau design Super 116E jackup drilling rigs US$ 530m Two MSC Gusto design liftboats US$ 224m 3

4 2008 Financial Highlights Revenue: US$ 740.8m up 58.5% Operating profit: US$ 92.5m up 12.8%* Net profit: US$ 95.5m up 10.8%* EPS (fully diluted): cents up 10.6%* Proposed final dividend: 3.15 cents per ordinary share Full year dividend: 9.55 cents per ordinary share No long term debt Strong balance sheet with US$ 98m in cash balances Listing on the Official List of the London Stock Exchange on 6 November * For the current year stated before reflecting exceptional charges for share based payments of US$ 6.6m (2007: US$ 14.7m) and stated before charging Main Market move professional costs of US$ 3.4m (2007: US$ nil).

5 Board Changes New Chairman Appointed Jonathan Silver Appointed Chairman on 27 March year history with Company Appointed Non-Executive Director on 24 August 2007 Actively involved in AIM and Main Market move Considerable experience in advising Boards of public companies Current CEO stepping down Peter Whitbread Effective date 1 May 2009 Advised intention to the market at time of initial offering New role as Director of International Development Focus of new role Develop & maintain client relations Long term strategic planning 5

6 Board Changes New CEO Nigel McCue Effective date 1 May 2009 Appointed as Non-Executive Director on 16 May 2006 Appointed COO of on 16 May 2008 Over 30 years experience in oil & gas Held a variety of Executive positions New Board structure from 1 May 2009: Executive Directors Non-Executive Directors Nigel McCue CEO Jonathan Silver Non-Executive Chairman Scott Doak CFO Colin Goodall Senior Independent NED Peter Whitbread DID Richard Raynaut Independent NED Brian Fredrick Independent NED 6

7 Operating Review 7

8 New Build EPC Project Status Scorpion Offshore Freedom hull successfully launched on 12 September 2008 on schedule & on budget (delivery April 2009) Scorpion Offshore Mischief modular hull fabrication progressing according to revised schedule following refinancing (delivery Q1 2010) Riginvest GP fabrication proceeding on limited basis & dependent on outcome of refinancing (potential delivery Q4 2010) Seajacks liftboat Kraken successfully delivered on schedule & on budget in March

9 New Build EPC Project Status Seajacks liftboat Leviathan to be delivered on schedule & on budget in June 2009 BassDrill Alpha self erecting tender assist drilling unit to be delivered on schedule & on budget in September 2009 Financing as follows Scorpion Freedom fully financed Scorpion Mischief substantial progress payment received & full financing expected Riginvest exploring various options & confident of securing full financing Seajacks fully financed Bassdrill meeting contractual obligations & conditional financing in place Sector outlook 9

10 New Build Construction for Offshore Oil & Gas Middle East leading FPSO process module fabricator Major projects delivered in 2008 Kashagan FGC barge 3 in March 2008 Saipem Gimboa process modules amounting to US$ 39m SBM Frade process modules amounting to US$ 69m Saipem Livorno FPSO process modules contract awarded amounting to US$ 29m & fabrication due to commence in April 2009 for Q delivery Master Marine award for the construction of spud cans amounting to US$ 17m for delivery in Q Sector outlook 10

11 Jackup Upgrade & Refurbishment Continue to be Middle East s leading jackup refurbishment provider 25 jackup rigs upgraded and refurbished in 2008 Major projects in 2008 NDC Al Ghallan completed in March 2009 amounting to US$ 59m Transocean CE Thornton completed in October 2008 amounting to US $ 24m Revenue largely generated from repeat business Hercules a major new client All international drilling contractors operating in the region are now repeat clients Projects continue to experience increased scope and growth in value Sector outlook 11

12 Hamriyah Development Dredging and quay wall construction to be completed by April 2009 Phased construction plan for Facility on going Initial operations planned to commence Q First phase capex budget reduced to US$ 55m (previously US$ 65m) Budget reduction reflects re-phasing of construction including concrete pads, quayside roads & some covered facilities 12

13 Thailand Development Lamprell Asia Limited incorporated in May 2008 First contract signed and revenue generating activities commenced in Q Lease of 47,000sqm for 5 years with 158m of deep water quayside Phase one development of facility complete Operational offices, stores and fabrication area completed Operating equipment procured Barge & tug boat for own use to be completed in May 2009 Local labour force sourced and trade tested Business to be developed during 2009 Sector outlook 13

14 Group Capacity Increase in total Group capacity Increase in quayside from 708m to 1,958m (+177%) Increase in land from 313,000sqm to 563,000sqm (+80%) Focus on capacity utilisation Review of Sharjah operations & possible accelerated transition to Hamriyah Current Capacity Land (sqm) Quayside (m) Jebel Ali Free Zone 179,000 - Sharjah 36, Hamriyah Free Zone 51, Thailand 47, Total 313, Future Capacity Land (sqm) Quayside (m) Jebel Ali Free Zone 179,000 - Sharjah 36, Hamriyah Free Zone 301,000 1,440 Thailand 47, Total 563,000 1,958 14

15 Financial Review 15

16 Summary Profit & Loss 330 Turnover (US$ m) EBITDA * (US$ m) & margin $61 $ % 19.1% $ % Net earnings * (US$ m) & margin $57 $86 $ % 18.4% 12.9% Strong revenue performance across key areas of activity Advanced project progress for EPC projects & strong rig refurbishment activity in H Decrease in margins driven by Revenue mix with increased EPC revenue Lower level of major project completions Competitive pressure on key rig refurbishment projects in Q4 Cost inflation More prudent revenue recognition policy from 10% to 20% POC on major EPC projects Significant increase in net earnings 16 * For the current year stated before reflecting exceptional charges for share based payments of US$ 6.6m (2007: US$ 14.7m) and stated before charging Main Market move professional costs of US$ 3.4m (2007: US$ nil).

17 Balance Sheet ($m) YE YE Non current assets Current assets Current liabilities (197.5) (275.4) Net current assets Total assets less current liabilities Non current liabilities (9.7) (14.3) Net assets Equity shareholders funds Strong balance sheet with zero long term debt Non current assets Net capex spend of US$ 54.4m Current assets Cash balance of US$ 97.8m Trade receivables increased by US$ 62.0m Amounts due from customers on contracts increased by US$ 79.0m Overall increase reflects impact of increased activity Current liabilities Increase in trade payables by US$ 59.4m Increase in other payables and accruals of US$ 52.7m 17

18 Cash Flow (US$ m) YE YE Cash flow generated from operations impacted by Net earnings * Depreciation & amortisation Working capital movements 86.9 (89.6) Others (3.8) 2.5 Cash generated from operations Net interest Margin deposits (6.5) 3.5 Net capital expenditure (14.6) (54.4) Funds due from/to related parties (0.10) Dividends (22.5) (37.5) Net acquisitions/disposals (4.6) 0.1 Purchase of treasury shares 0.0 (2.6) Borrowings Net cash flow (59.1) Opening net cash Closing net cash late payment from EPC project of US$ 70.3m Working capital movements 2007 reflected significant advances on new EPC contracts with net increase of US$ 108.1m Start up of projects largely in 2007 Progress of major projects significantly advanced with increased revenue recognition Progress payments received post year end Net capital expenditure reflects capex spend of US$ 54.4m Short term bank facilities reflect temporary draw down pre year end 18 * For the current year stated before reflecting exceptional charges for share based payments of US$ 6.6m (2007: US$ 14.7m) and stated before charging Main Market move professional costs of US$ 3.4m (2007: US$ nil).

19 Outlook & Future Strategy 19

20 Market Outlook Period of near term energy price uncertainty and volatility Credit crisis has adversely affected client ability to finance projects Supply and demand fundamentals support historically high energy prices in the medium to long term Production decline will become a primary market driver in the medium term Levels of drilling and development activity in Middle East and India, both on and off shore, are likely to see some reduction in the near term Clients are trying to cut costs and defer capital expenditure in short term We remain confident that the market will recover in the medium term 20

21 Future Strategy Cash Flow Maintaining sufficient levels of working capital is an area of constant management attention Client payment terms and payment security are a key component to our cash flow model Creditor payments terms are being renegotiated and extended to improve our cash flow Capital expenditure is being deferred when appropriate considering short term revenue reductions Review of current banking facilities Reduction of final 2008 final dividend reflects a cautious approach to cash flow 21

22 Future Strategy - Margin Margins are under pressure from competitive forces and reduced short term demand Management focus is therefore being given to a wide range of operational issues including Optimising administration and yard manpower Focusing on the cost of all goods and services Optimisation of all resources including equipment hire Consolidation of resources across all UAE facilities Flexible business model with low fixed overheads allows cost savings to be achieved quickly 22

23 Future Strategy New Business Increasing our order book and maximising revenue and profit is our main priority Maintain our focus on core activities Rig refurbishment FPSO modules New build jackup rigs and other offshore units Related diversification and aggressive marketing Wind farm installation jackups Semi-submersible (new build and refurbishment) Drill ship refurbishment Power / desalination vessels Cryogenic transportation Regasification 23

24 Core Values Continue to deliver projects on time & on budget Deliver projects of high quality & complexity Maintain strong customer relationships Maintain non litigious relationships Focus on repeat business Deliver customer satisfaction 24